104594 Federal Register / Vol. 89, No. 246 / Monday, December 23, 2024 / Notices 

1 15 U.S.C. 7201 et seq. 

2Public Law 111–203, 124 Stat. 1376 (2010). 

3 17 CFR 202.190. 

4OMB Report to the Congress on the BBEDCA 

251A Sequestration for Fiscal Year 2025 (Mar. 11, 

2024), available at https://www.whitehouse.gov/wpcontent/uploads/2024/03/BBEDCA_251A_

Sequestration_Report_FY2025.pdf. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Securities Act of 1933 Release No. 11345/ 

December 18, 2024; Securities Exchange 

Act of 1934 Release No. 101950/December 

18, 2024] 

Order Approving Public Company 

Accounting Oversight Board Budget 

and Annual Accounting Support Fee 

for Calendar Year 2025 

The Sarbanes-Oxley Act of 2002, as 

amended (the ‘‘Sarbanes-Oxley Act’’),1

established the Public Company 

Accounting Oversight Board (‘‘PCAOB’’) 

to oversee the audits of companies that 

are subject to the securities laws, and 

related matters, in order to protect the 

interests of investors and further the 

public interest in the preparation of 

informative, accurate, and independent 

audit reports. Section 982 of the DoddFrank Wall Street Reform and Consumer 

Protection Act 2 amended the SarbanesOxley Act to provide the PCAOB with 

explicit authority to oversee auditors of 

broker-dealers registered with the 

Securities and Exchange Commission 

(the ‘‘Commission’’). The PCAOB 

accomplishes these investor protection 

and public interest goals through the 

registration of public accounting firms, 

standard setting, inspections, and 

investigation and disciplinary programs. 

The PCAOB is subject to the 

comprehensive oversight of the 

Commission. 

Section 109 of the Sarbanes-Oxley Act 

provides that the PCAOB shall establish 

a reasonable annual accounting support 

fee, as may be necessary or appropriate 

to establish and maintain the PCAOB. 

Under Section 109(f) of the SarbanesOxley Act, the aggregate annual 

accounting support fee shall not exceed 

the PCAOB’s aggregate ‘‘recoverable 

budget expenses,’’ which may include 

operating, capital, and accrued items. 

The PCAOB’s annual budget and 

accounting support fee are subject to 

approval by the Commission. In 

addition, the PCAOB must allocate the 

annual accounting support fee among 

issuers and registered brokers and 

dealers. 

Section 109(b) of the Sarbanes-Oxley 

Act directs the PCAOB to establish a 

budget for each fiscal year in accordance 

with the PCAOB’s internal procedures, 

subject to approval by the Commission. 

Rule 190 of Regulation P (the ‘‘Budget 

Rule’’) governs the Commission’s review 

and approval of PCAOB budgets and 

annual accounting support fees.3 The 

Budget Rule provides, among other 

things, a timetable for the preparation 

and submission of the PCAOB budget 

and for Commission actions related to 

each budget, a description of the 

information that should be included in 

each budget submission, limits on the 

PCAOB’s ability to incur expenses and 

obligations except as provided in the 

approved budget, procedures relating to 

supplemental budget requests, 

requirements for the PCAOB to provide 

on a quarterly basis certain budgetrelated information, and a list of 

definitions that apply to the rule and to 

general discussions of PCAOB budget 

matters. 

In accordance with the Budget Rule, 

in March 2024 the PCAOB provided the 

Commission with a narrative 

description of its program issues and 

outlook for the 2025 budget year. In 

response, the Commission provided the 

PCAOB with general budgetary 

guidance for the 2025 budget year. The 

PCAOB subsequently delivered a 

preliminary budget and budget 

justification to the Commission. Staff 

from the Commission’s Office of the 

Chief Accountant and Office of 

Financial Management dedicated a 

substantial amount of time to the review 

and analysis of the PCAOB’s programs, 

projects, and budget estimates and 

participated in a number of meetings 

with staff of the PCAOB to further 

develop an understanding of the 

PCAOB’s budget and operations. During 

the course of this review, Commission 

staff relied upon representations and 

supporting documentation from the 

PCAOB. Based on this review, the 

Commission issued a ‘‘passback’’ letter 

to the PCAOB on October 30, 2024. On 

November 21, 2024, the PCAOB adopted 

its 2025 budget and accounting support 

fee during an open meeting, and 

subsequently submitted that budget to 

the Commission for approval. 

After considering the above, the 

Commission did not identify any 

proposed disbursements in the 2025 

budget adopted by the PCAOB that are 

not properly recoverable through the 

annual accounting support fee, and the 

Commission believes that the aggregate 

proposed 2025 annual accounting 

support fee does not exceed the 

PCAOB’s aggregate recoverable budget 

expenses for 2025. 

The Commission continues to 

emphasize the importance of the 

PCAOB’s identification of efficiencies 

and process improvements. 

Accordingly, the Commission requests 

that the PCAOB continue to evaluate its 

operational efficiency, improvements, 

and budgetary needs and submit such 

assessments to the Commission in 

connection with the 2026 budget cycle. 

Coordination between the 

Commission and PCAOB continues to 

be important. The Commission directs 

the PCAOB during 2025 to continue to 

hold quarterly meetings, as necessary, 

with the Commission’s staff to discuss 

important policy initiatives, changes 

related to program areas, and significant 

impacts to the PCAOB’s 2025 budget, 

including significant differences 

between actual and budgeted amounts 

and anticipated cost-savings. Separately, 

the Commission directs the PCAOB to 

continue its written quarterly updates 

on recent activities, including strategic 

initiatives. The Commission expects the 

PCAOB to make itself available to meet 

with individual Commissioners on these 

and other topics. Further, the 

Commission requests that the PCAOB 

submit its 2024 annual report to the 

Commission by March 31, 2025. 

The Commission understands that the 

Office of Management and Budget 

(‘‘OMB’’) has determined that the 2025 

budget of the PCAOB is subject to 

sequestration under the Budget Control 

Act of 2011.4 For 2024, the PCAOB 

sequestered $21.9 million. That amount 

will become available in 2025. For 2025, 

the sequestration amount will be 5.7% 

or $22.8 million. Consequently, we 

expect the PCAOB will have 

approximately $0.9 million less funds 

available from the 2024 sequestration 

for spending in 2025. Accordingly, the 

PCAOB should submit a revised 

spending plan for 2025 reflecting a $0.9 

million reduction to budgeted 

expenditures as a result of the increase 

in sequestration amount from 2024 to 

2025. 

The Commission has determined that 

the PCAOB’s 2025 budget and annual 

accounting support fee are consistent 

with Section 109 of the Sarbanes-Oxley 

Act. Accordingly, 

It is ordered, pursuant to Section 109 

of the Sarbanes-Oxley Act, that the 

PCAOB budget and annual accounting 

support fee for calendar year 2025 are 

approved. 

By the Commission. 

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–30600 Filed 12–20–24; 8:45 am] 

BILLING CODE 8011–01–P 


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